If you are going through a separation and divorce, probably the last thing on your mind is what to do if you or your spouse should happen to pass away during the divorce process.
Unfortunately, while not common, this does happen. It is especially concerning if one of the spouses is sick with a terminal illness during the divorce process. (I know that many of you are thinking, that’s just wrong… but believe me, it does happen).
Which leads us to the question of the day… can you write your spouse out of your will? In other words, “can you disinherit your spouse?”
The long and the short of it is that yes, you can “disinherit” your spouse. But there are statutory limitations on just what you can do, which I will address in just a bit. But first, I want to share with you what your options are if you were to be written out of your spouse’s will.
What Can You Do if Your Spouse “Disinherits” You?
In North Carolina, you are permitted to take what is called an “elective share” of your spouse’s estate, regardless of whether you were happily married or had begun the process of separating.
This means that you can take a percentage of your spouse’s taxable estate after they pass on. The percentage in North Carolina will depend on a number of factors, including whether or not you had children and how long you were married.
It doesn’t matter whether your spouse has taken steps to keep assets out of probate or not. For example, if they listed someone else as the beneficiary on their life insurance, or provided a payable on death designation to someone else on a bank account, or even listed new beneficiaries on their retirement accounts – all of these assets are included in the total net assets that are subject to the “elective share”.
Basically, any asset that would be included on a Federal Estate Tax Return is subject to the elective share statute. Some of these assets include:
- Bank Accounts
- Personal Property
- Real Property (i.e. your house)
- Life Insurance proceeds
- Retirement Accounts
- Investment Accounts
Should you undertake estate planning while going through a separation and divorce?
At a minimum, every client going through a divorce should consider meeting with an estate planning lawyer. The reason for this is two-fold:
- Many clients don’t have any estate planning documents in place anyway – so this is an ideal time to consider putting a plan in place;
- Clients that do have documents in place typically leave all of their assets to their estranged spouse.
In either situation, it is important to sit down with an estate planning lawyer to discuss what would happen if you die without any additional planning.
I don’t frequently advise my clients to undergo significant estate planning while they are in the process of separation and divorce. However, especially in situations where my client has ZERO planning in place, I do recommend that they talk with an estate planning lawyer and have, at a minimum, a “Divorce Will” drawn up.
A “divorce will” is a simple will that will dictate what will happen to my client’s assets if they should happen to pass on after the decision has been made to end the marriage, but before the separation agreement has been signed or a divorce judgment entered. In addition, we will make sure that my client has some additional documents in place, such as a Health Care Power of Attorney, Durable Power of Attorney, Living Will, Advanced Directives, etc.
While the division of assets during the divorce could change how we would approach your estate planning and cause an extensive re-write of your plan, this reason alone is not sufficient enough to ignore planning until the divorce is finalized.